Vocabulary Letter H

Question 1

Habendum Clause

Answer 1

The “to have and to hold” clause that defines the quantity of the estate granted in the deed.

Question 2

Hard Money Loan

Answer 2

A loan that is underwritten with the condition and value of the property as the primary criteria for approval. Secondary issues may include the credit of the borrower, the ability of the borrower to repay the loan and/or the ability of the borrower to manage the property or successfully complete a rehab and sell the property. Owner occupancy, debt ratios and other issues are seldom a factor. Appraisals rather than purchase prices are used to determine value. Cash out purchases are often allowed and are another key benefit. These loans are usually approved within days and are often funded in two weeks or under with times as short as two or three days not uncommon. The cost for the benefits of speed of funding, lax underwriting and other advantages is typically a moderately high interest rate (usually low to mid teens) and high points (usually 5 to 10). (See definition of “underwriting” below.)

Question 3

Hazard Insurance

Answer 3

Insurance to provide compensation if the improvements are damaged or destroyed. It is almost always a requirement of loans.

Question 4

Hereditaments

Answer 4

property, personal and real, capable of being inherited

Question 5

Hiatus

Answer 5

A gap between two parcels of land that is not included in the legal description of either property.

Question 6

Highest and Best Use

Answer 6

the use that is most likely to produce the greatest net return to the land and/or building over a given period.

Question 7

Holdover Tenant

Answer 7

a tenant who remains in possession of leased property after the expiration of the lease term.

Question 8

Home Equity Loan

Answer 8

In the most literal sense, this expression applies to virtually all loans (first mortgages and second mortgages, fixed and adjustable interest rates, credit lines and fully amortizing loans, etc.) placed on an owner occupied property when the loan-to-value after the Home Equity Loan closes is no higher than 100%. That is, it is a loan secured by the available equity of an owner occupied residential property.

Question 9

Homeowner Association (HOA)

Answer 9

an organization of the homeowners in a particular subdivision, planned unit development, or condominium created to enforce deed restrictions and manage common elements of the development.

Question 10

Homeowners’ Warranty

Answer 10

A special insurance policy that covers certain home repairs for a specified amount of time.

Question 11

Homeowner’s Insurance (Hazard Insurance)

Answer 11

insurance coverage that compensates for physical damage to a property from fire, wind, vandalism, or other hazards. The policy typically combines personal liability insurance and property hazard insurance coverage for a dwelling and its contents. See also homeowner’s insurance.

Question 12

Homestead

Answer 12

status provided to a homeowner’s principal residence by some state statutes to protect the home against judgments up to specified amounts.

Question 13

Homestead Exemption

Answer 13

in some jurisdictions a reduction in the assessed value allowed for one’s personal residence.

Question 14

Housing and Urban Development (HUD)

Answer 14

a federal government agency established to implement certain federal housing and community development programs.

Question 15

Housing Code

Answer 15

local government ordinance that sets minimum standards of safety and sanitation for existing residential buildings.

Question 16

Hypothecate

Answer 16

to pledge somehing as security without having to give up possession of it.